The Microsoft layoff rumors of the last few weeks came true today as the company announced 2Q09 results early – Microsoft to slash 5,000 jobs, reports lower-than-expected profit and sales for 2nd quarter:
Microsoft Corp. said Thursday it is cutting 5,000 jobs over the next 18 months, a sign of how badly even the biggest and richest companies are being stung by the recession.
The layoffs appear to be a first for Microsoft, which was founded in 1975, aside from relatively limited staff cuts the software company made after acquiring companies.
The company announced the cuts as it reported an 11 percent drop in second-quarter profit, which fell short of Wall Street’s expectations. Microsoft shares plunged 7 percent in morning trading.
Microsoft said the job cuts will reduce operating costs by $1.5 billion as it prepares for lower revenue and earnings in the second half of the year. The company says it is unable to offer profit and revenue guidance for the rest of the year, because of the market volatility.
No one expected a great quarterly report, but the lack of guidance will surely spook the market.